Paper manufacturer M-Real has warned customers that it may increase its prices by between 5% and 8% to keep up with spiralling production costs. The warning came as the European company, and paper sector as a whole, faces cost pressures from the increasing energy, wood, fillers and transport prices. Such cost and subsequent price rises are expected to continue into 2008.
Senior vice president Marcel Bigler said: We are currently experiencing spiralling production costs and cannot see any respite in the foreseeable future.
The Confederation of Paper Industries (CPI) recently expressed concerns about such costs and the related risks for the UK paper reprocessing industry. A CPI spokeswoman said: Although there are encouraging signs of potential new UK reprocessing capacity (Palm, Ecco, Aylesford), there are still risks to the UK industry from energy and raw material costs. The current UK infrastructure is by no means secure and means there is more recovered paper being shipped overseas for reprocessing than ever before. Paper reprocessing in the UK will only account for 46% of material collected in 2007.
The organisation also warned: Pressure from Waste Shipment Regulations and increased back-shipping costs have the potential to restrict UK competitiveness in developing markets and there is a risk that exporting paper may become uneconomic in the future.